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Kristi Unzicker initially hesitated when her colleagues suggested building a crude
oil terminal on a contaminated Texas lot described as a “Superfund site on steroids.”

But the Environmental Protection Agency now hopes more developers like Unzicker, manager
of environmental compliance at energy infrastructure provider Genesis Energy LP, choose
contaminated properties deemed ready for redevelopment. To that end, the agency is
encouraging potentially responsible parties to integrate redevelopment opportunities
into the remediation process for superfund sites.

The top level focus from EPA Administrator Scott Pruitt, who has made cleaning up
superfund sites an agency priority, and new reassurances about liability risks are
causing developers and buyers to take a second look at building on some of the most
contaminated properties in the country.

Unzicker wasn’t comfortable building on the site, Tex-Tin Corp. in Texas City, Texas—home
to a smelter, slag piles, and wastewater ponds filled with acidic water—until she
saw an EPA
document stating the site was ready for redevelopment.

The EPA is drafting stronger reassurance letters and reaching out to companies that
deal in contaminated property purchases and environmental insurance, hoping to spur
their interest in remediating and buying superfund sites. The letters contain information
about potential liabilities at a site so the parties can make more informed decisions
and provide clarity to lenders.

“Many of the shortfalls are ones EPA is well aware of and has identified for improvement,”
she said in an email.

New Demand for Superfund Sites

Companies that redevelop contaminated properties tell Bloomberg Environment the agency’s
initiative soon could drive up demand for superfund site redevelopment.

The agency’s “executive level focus”
on streamlining the superfund program and efforts to clarify liability issues are
making sites more appealing, Mary Hashem, founder and principal of RE|Solutions LLC,
told Bloomberg Environment.

Pruitt’s
Superfund Redevelopment Focus List consists of 31 sites. Most still are on the National Priorities List. In some cases,
the EPA has highlighted parts of those sites that are ready for development.

Potential buyers and developers have been frustrated by the slow pace of the EPA’s
decisions and prolonged negotiations with companies that are potentially responsible
for cleaning up the contamination. While superfund sites take years—and sometimes
decades—to clean up, real estate trends come and go.

“As a buyer coming in, you need to know what the remedy is going to be,” Hashem said.

Ready for Reuse

The Tex-Tin site Unzicker’s firm built on is “a Superfund site on steroids,” Bob Piniewski,
senior project coordinator at Project Navigator Ltd., said during a Feb. 27 superfund
redevelopment webinar hosted by the EPA. Piniewski’s company consults on and guides
remediation projects, and Piniewski provided Unzicker’s team with institutional knowledge
about the site.

The Tex-Tin site still is on the National Priorities List. A portion of it was remediated
and ready for redevelopment by 2003, leading the EPA to issue one of its first “ready
for reuse”
determinations. The determination helps future owners decide what uses would be appropriate
for the site, while retaining the protectiveness of the site remedy.

“I saw the ready for reuse determination, and that got me a little more comfortable,”
Unzicker said during the webinar.

Texas City Terminal Railway Co. bought the site in 2010, and Genesis Energy redeveloped
part of the site into a crude oil terminal in 2016.

Piniewski said the parties working on the site’s redevelopment were determined to
keep the end use in mind.

“I think all parties would say it was really a good guiding principle for the entire
redevelopment project,”
Piniewski said during the webinar.

Focus List

The EPA’s current focus on redevelopment started with Pruitt’s 2017
Superfund Task Force recommendations, which included ways to streamline the cleanup process for sites on the National
Priorities List. Pruitt wants to get sites off the list and back into productive use
faster than the agency has in the past.

“Everything that we’re seeing in the superfund task force recommendations is designed
to move cleanup forward, and ultimately, development has a role in that,” Randall
Jostes, chief executive officer of Environmental Liability Transfer Inc., told Bloomberg
Environment.

Environmental Liability Transfer helps companies get contaminated sites off their
books by buying or acquiring the sites and cleaning them up to regulatory requirements.

About 95 percent of the company’s remediated sites are redeveloped for industrial
use, Jostes said, while the remaining 5 percent are redeveloped for commercial and
residential use.

“Not all superfund sites are candidates to be developed, but many are, and they can
be significant wins for the community, for the municipality in which they’re located,
for the local government, and the state government,” Jostes said.

Environmental Liability Transfer is working with EPA headquarters and regional offices
on 18 of the 31 sites Pruitt has targeted for redevelopment, Jostes said.

Sites on the list include the Metal Bank site in Philadelphia; Quendall Terminal in
Renton, Wash.; U.S. Smelter and Lead Refinery in East Chicago, Ind.; and New Bedford
Harbor in Massachusetts.

Hashem’s company is interested in buying a superfund site in EPA Region 10, which
covers the Pacific Northwest. The EPA’s “incredibly responsive” communications with
her company are indicative of its focus on reusing contaminated properties, she said.

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